Bill Text: NY S02844 | 2019-2020 | General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relates to securing payment of wages for work already performed; creates a lien remedy for all employees; provides grounds for attachment; relates to procedures where employees may hold shareholders of non-publicly traded corporations personally liable for wage theft; relates to rights for victims of wage theft to hold the ten members with the largest ownership interests in a company personally liable for wage theft.
Spectrum: Partisan Bill (Democrat 13-0)
Status: (Vetoed) 2020-01-01 - VETOED MEMO.291 [S02844 Detail]
Download: New_York-2019-S02844-Introduced.html
Bill Title: Relates to securing payment of wages for work already performed; creates a lien remedy for all employees; provides grounds for attachment; relates to procedures where employees may hold shareholders of non-publicly traded corporations personally liable for wage theft; relates to rights for victims of wage theft to hold the ten members with the largest ownership interests in a company personally liable for wage theft.
Spectrum: Partisan Bill (Democrat 13-0)
Status: (Vetoed) 2020-01-01 - VETOED MEMO.291 [S02844 Detail]
Download: New_York-2019-S02844-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 2844 2019-2020 Regular Sessions IN SENATE January 29, 2019 ___________ Introduced by Sen. RAMOS -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary AN ACT to amend the lien law, in relation to employee liens; to amend the labor law, in relation to employee complaints; to amend the civil practice law and rules, in relation to grounds for attachment; to amend the business corporation law, in relation to streamlining proce- dures where employees may hold shareholders of non-publicly traded corporations personally liable for wage theft; and to amend the limit- ed liability company law, in relation to creating a right for victims of wage theft to hold the ten members with the largest ownership interests in a company personally liable for wage theft The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 2 of the lien law is amended by adding three new 2 subdivisions 21, 22 and 23 to read as follows: 3 21. Employee. The term "employee", when used in this chapter, shall 4 have the same meaning as "employee" pursuant to articles one, six, nine- 5 teen and nineteen-A of the labor law, as applicable, or the Fair Labor 6 Standards Act, 29 U.S.C. § 201 et. seq., as applicable. 7 22. Employer. The term "employer", when used in this chapter, shall 8 have the same meaning as "employer" pursuant to articles one, six, nine- 9 teen and nineteen-A of the labor law, as applicable, or the Fair Labor 10 Standards Act, 29 U.S.C. § 201 et. seq., as applicable. 11 23. Wage claim. The term "wage claim", when used in this chapter, 12 means a claim that an employee has suffered a violation of sections one 13 hundred seventy, one hundred ninety-one, one hundred ninety-three, one 14 hundred ninety-six-d, six hundred fifty-two or six hundred seventy-three 15 of the labor law or the related regulations and wage orders promulgated 16 by the commissioner, a claim for wages due to an employee pursuant to an 17 employment contract that were unpaid in violation of that contract, or a EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD00946-01-9S. 2844 2 1 claim that an employee has suffered a violation of 29 U.S.C. § 206 or 2 207. 3 § 2. Section 3 of the lien law, as amended by chapter 137 of the laws 4 of 1985, is amended to read as follows: 5 § 3. Mechanic's lien and employee's lien on [real] property. 1. 6 Mechanic's lien. A contractor, subcontractor, laborer, materialman, 7 landscape gardener, nurseryman or person or corporation selling fruit or 8 ornamental trees, roses, shrubbery, vines and small fruits, who performs 9 labor or furnishes materials for the improvement of real property with 10 the consent or at the request of the owner thereof, or of his agent, 11 contractor or subcontractor, and any trust fund to which benefits and 12 wage supplements are due or payable for the benefit of such laborers, 13 shall have a lien for the principal and interest, of the value, or the 14 agreed price, of such labor, including benefits and wage supplements due 15 or payable for the benefit of any laborer, or materials upon the real 16 property improved or to be improved and upon such improvement, from the 17 time of filing a notice of such lien as prescribed in this chapter. 18 Where the contract for an improvement is made with a husband or wife and 19 the property belongs to the other or both, the husband or wife contract- 20 ing shall also be presumed to be the agent of the other, unless such 21 other having knowledge of the improvement shall, within ten days after 22 learning of the contract give the contractor written notice of his or 23 her refusal to consent to the improvement. Within the meaning of the 24 provisions of this chapter, materials actually manufactured for but not 25 delivered to the real property, shall also be deemed to be materials 26 furnished. 27 2. Employee's lien. An employee who has a wage claim as that term is 28 defined in subdivision twenty-three of section two of this chapter shall 29 have a lien on his or her employer's interest in property for the value 30 of the wage claim arising out of the employment, including liquidated 31 damages pursuant to subdivision one-a of section one hundred ninety- 32 eight, section six hundred sixty-three or section six hundred eighty-one 33 of the labor law, or 29 U.S.C. § 216 (b), from the time of filing a 34 notice of such lien as prescribed in this chapter. An employee's lien 35 based on a wage claim may be had against the employer's interest in real 36 property and against the employer's interest in personal property that 37 can be sufficiently described within the meaning of section 9-108 of the 38 uniform commercial code, except that an employee's lien shall not extend 39 to deposit accounts or goods as those terms are defined in section 9-102 40 of the uniform commercial code. The department of labor and the attor- 41 ney general may obtain an employee's lien for the value of wage claims 42 of the employees who are the subject of their investigations, court 43 actions or administrative agency actions. 44 3. As used in this article and unless otherwise specified, a lien 45 shall mean an employee's lien or a mechanic's lien. 46 § 3. Subdivisions 1 and 2 of section 4 of the lien law, subdivision 1 47 as amended by chapter 515 of the laws of 1929 and subdivision 2 as added 48 by chapter 704 of the laws of 1985, are amended to read as follows: 49 (1) [Such] A mechanic's or employee's lien and employee's lien against 50 real property shall extend to the owner's right, title or interest in 51 the real property and improvements, existing at the time of filing the 52 notice of lien, or thereafter acquired, except as hereinafter in this 53 article provided. If an owner assigns his interest in such real property 54 by a general assignment for the benefit of creditors, within thirty days 55 prior to such filing, the lien shall extend to the interest thus 56 assigned. If any part of the real property subjected to such lien beS. 2844 3 1 removed by the owner or by any other person, at any time before the 2 discharge thereof, such removal shall not affect the rights of the 3 lienor, either in respect to the remaining real property, or the part so 4 removed. If labor is performed for, or materials furnished to, a 5 contractor or subcontractor for an improvement, the mechanic's lien 6 shall not be for a sum greater than the sum earned and unpaid on the 7 contract at the time of filing the notice of lien, and any sum subse- 8 quently earned thereon. In no case shall the owner be liable to pay by 9 reason of all mechanic's liens created pursuant to this article a sum 10 greater than the value or agreed price of the labor and materials 11 remaining unpaid, at the time of filing notices of such liens, except as 12 hereinafter provided. 13 (2) [Such] A mechanic's or employee's lien shall not extend to the 14 owner's right, title or interest in real property and improvements, 15 existing at the time of filing the notice of lien if such lien arises 16 from the failure of a lessee of the right to explore, develop or produce 17 natural gas or oil, to pay for, compensate or render value for improve- 18 ments made with the consent or at the request of such lessee by a 19 contractor, subcontractor, materialman, equipment operator or owner, 20 landscaper, nurseryman, or person or corporation who performs labor or 21 furnishes materials for the exploration, development, or production of 22 oil or natural gas or otherwise improves such leased property. Such 23 mechanic's or employee's lien shall extend to the improvements made for 24 the exploration, development and production of oil and natural gas, and 25 the working interest held by a lessee of the right to explore, develop 26 or produce oil and natural gas. 27 § 4. The opening paragraph of section 4-a of the lien law, as amended 28 by chapter 696 of the laws of 1959, is amended to read as follows: 29 The proceeds of any insurance which by the terms of the policy are 30 payable to the owner of real property improved, and actually received or 31 to be received by him because of the destruction or removal by fire or 32 other casualty of an improvement on which lienors have performed labor 33 or services or for which they have furnished materials, or upon which an 34 employee has established an employee's lien, shall after the owner has 35 been reimbursed therefrom for premiums paid by him, if any, for such 36 insurance, be subject to liens provided by this act to the same extent 37 and in the same order of priority as the real property would have been 38 had such improvement not been so destroyed or removed. 39 § 5. Subdivisions 1, 2 and 5 of section 9 of the lien law, as amended 40 by chapter 515 of the laws of 1929, are amended to read as follows: 41 1. The name of the lienor, and either the residence of the lienor or 42 the name and business address of the lienor's attorney, if any; and if 43 the lienor is a partnership or a corporation, the business address of 44 such firm, or corporation, the names of partners and principal place of 45 business, and if a foreign corporation, its principal place of business 46 within the state. 47 2. The name of the owner of the [real] property against whose interest 48 therein a lien is claimed, and the interest of the owner as far as known 49 to the lienor. 50 5. The amount unpaid to the lienor for such labor or materials, or the 51 amount of the wage claim if a wage claim is the basis for establishment 52 of the lien, the items of the wage claim and the value thereof which 53 make up the amount for which the lienor claims a lien. 54 § 6. Subdivision 1 of section 10 of the lien law, as amended by chap- 55 ter 367 of the laws of 2011, is amended to read as follows:S. 2844 4 1 1. (a) Notice of mechanic's lien may be filed at any time during the 2 progress of the work and the furnishing of the materials, or, within 3 eight months after the completion of the contract, or the final perform- 4 ance of the work, or the final furnishing of the materials, dating from 5 the last item of work performed or materials furnished; provided, howev- 6 er, that where the improvement is related to real property improved or 7 to be improved with a single family dwelling, the notice of mechanic's 8 lien may be filed at any time during the progress of the work and the 9 furnishing of the materials, or, within four months after the completion 10 of the contract, or the final performance of the work, or the final 11 furnishing of the materials, dating from the last item of work performed 12 or materials furnished; and provided further where the notice of mechan- 13 ic's lien is for retainage, the notice of mechanic's lien may be filed 14 within ninety days after the date the retainage was due to be released; 15 except that in the case of a mechanic's lien by a real estate broker, 16 the notice of mechanic's lien may be filed only after the performance of 17 the brokerage services and execution of lease by both lessor and lessee 18 and only if a copy of the alleged written agreement of employment or 19 compensation is annexed to the notice of lien, provided that where the 20 payment pursuant to the written agreement of employment or compensation 21 is to be made in installments, then a notice of lien may be filed within 22 eight months after the final payment is due, but in no event later than 23 a date five years after the first payment was made. For purposes of this 24 section, the term "single family dwelling" shall not include a dwelling 25 unit which is a part of a subdivision that has been filed with a munici- 26 pality in which the subdivision is located when at the time the lien is 27 filed, such property in the subdivision is owned by the developer for 28 purposes other than his personal residence. For purposes of this 29 section, "developer" shall mean and include any private individual, 30 partnership, trust or corporation which improves two or more parcels of 31 real property with single family dwellings pursuant to a common scheme 32 or plan. [The] 33 (b) Notice of employee's lien may be filed at any time not later than 34 three years following the end of the employment giving rise to the wage 35 claim. 36 (c) A notice of lien, other than for a lien on personal property, must 37 be filed in the clerk's office of the county where the property is situ- 38 ated. If such property is situated in two or more counties, the notice 39 of lien shall be filed in the office of the clerk of each of such coun- 40 ties. The county clerk of each county shall provide and keep a book to 41 be called the "lien docket," which shall be suitably ruled in columns 42 headed "owners," "lienors," "lienor's attorney," "property," "amount," 43 "time of filing," "proceedings had," in each of which he shall enter the 44 particulars of the notice, properly belonging therein. The date, hour 45 and minute of the filing of each notice of lien shall be entered in the 46 proper column. Except where the county clerk maintains a block index, 47 the names of the owners shall be arranged in such book in alphabetical 48 order. The validity of the lien and the right to file a notice thereof 49 shall not be affected by the death of the owner before notice of the 50 lien is filed. A notice of employee's lien on personal property must be 51 filed, together with a financing statement, in the filing office as set 52 forth in section 9-501 of the uniform commercial code. 53 § 7. Section 11 of the lien law, as amended by chapter 147 of the laws 54 of 1996, is amended to read as follows: 55 § 11. Service of copy of notice of lien. 1. Within five days before 56 or thirty days after filing the notice of a mechanic's lien, the lienorS. 2844 5 1 shall serve a copy of such notice upon the owner, if a natural person, 2 (a) by delivering the same to him personally, or if the owner cannot be 3 found, to his agent or attorney, or (b) by leaving it at his last known 4 place of residence in the city or town in which the real property or 5 some part thereof is situated, with a person of suitable age and 6 discretion, or (c) by registered or certified mail addressed to his last 7 known place of residence, or (d) if such owner has no such residence in 8 such city or town, or cannot be found, and he has no agent or attorney, 9 by affixing a copy thereof conspicuously on such property, between the 10 hours of nine o'clock in the forenoon and four o'clock in the afternoon; 11 if the owner be a corporation, said service shall be made (i) by deliv- 12 ering such copy to and leaving the same with the president, vice-presi- 13 dent, secretary or clerk to the corporation, the cashier, treasurer or a 14 director or managing agent thereof, personally, within the state, or 15 (ii) if such officer cannot be found within the state by affixing a copy 16 thereof conspicuously on such property between the hours of nine o'clock 17 in the forenoon and four o'clock in the afternoon, or (iii) by regis- 18 tered or certified mail addressed to its last known place of business. 19 Failure to file proof of such a service with the county clerk within 20 thirty-five days after the notice of lien is filed shall terminate the 21 notice as a lien. Until service of the notice has been made, as above 22 provided, an owner, without knowledge of the lien, shall be protected in 23 any payment made in good faith to any contractor or other person claim- 24 ing a lien. 25 2. Within five days before or thirty days after filing the notice of 26 an employee's lien, the lienor shall serve a copy of such notice upon 27 the employer, if a natural person, (a) by delivering the same to him 28 personally, or if the employer cannot be found, to his agent or attor- 29 ney, or (b) by leaving it as his last known place of residence or busi- 30 ness, with a person of suitable age and discretion, or (c) by registered 31 or certified mail addressed to his last known place of residence or 32 business, or (d) if such employer owns real property, by affixing a copy 33 thereof conspicuously on such property, between the hours of nine 34 o'clock in the forenoon and four o'clock in the afternoon. The lienor 35 also shall, within thirty days after filing the notice of employee's 36 lien, affix a copy thereof conspicuously on the real property identified 37 in the notice of employee's lien, between the hours of nine o'clock in 38 the forenoon and four o'clock in the afternoon. If the employer be a 39 corporation, said service shall be made (i) by delivering such copy to 40 and leaving the same with the president, vice-president, secretary or 41 clerk to the corporation, the cashier, treasurer or a director or manag- 42 ing agent thereof, personally, within the state, or (ii) if such officer 43 cannot be found within the state by affixing a copy thereof conspicuous- 44 ly on such property between the hours of nine o'clock in the forenoon 45 and four o'clock in the afternoon, or (iii) by registered or certified 46 mail addressed to its last known place of business, or (iv) by delivery 47 to the secretary of the department of state in the same manner as 48 required by subparagraph one of paragraph (b) of section three hundred 49 six of the business corporation law. Failure to file proof of such a 50 service with the county clerk within thirty-five days after the notice 51 of lien is filed shall terminate the notice as a lien. Until service of 52 the notice has been made, as above provided, an owner, without knowledge 53 of the lien, shall be protected in any payment made in good faith to any 54 other person claiming a lien. 55 § 8. Section 11-b of the lien law, as amended by chapter 147 of the 56 laws of 1996, is amended to read as follows:S. 2844 6 1 § 11-b. Copy of notice of mechanic's lien to a contractor or subcon- 2 tractor. Within five days before or thirty days after filing a notice 3 of mechanic's lien in accordance with section ten of this chapter or the 4 filing of an amendment of notice of mechanic's lien in accordance with 5 section twelve-a of this [chapter] article the lienor shall serve a copy 6 of such notice or amendment by certified mail on the contractor, subcon- 7 tractor, assignee or legal representative for whom he was employed or to 8 whom he furnished materials or if the lienor is a contractor or subcon- 9 tractor to the person, firm or corporation with whom the contract was 10 made. A lienor having a direct contractual relationship with a subcon- 11 tractor or a sub-subcontractor but not with a contractor shall also 12 serve a copy of such notice or amendment by certified mail to the 13 contractor. Failure to file proof of such a service with the county 14 clerk within thirty-five days after the notice of lien is filed shall 15 terminate the notice as a lien. Any lienor, or a person acting on behalf 16 of a lienor, who fails to serve a copy of the notice of mechanic's lien 17 as required by this section shall be liable for reasonable attorney's 18 fees, costs and expenses, as determined by the court, incurred in 19 obtaining such copy. 20 § 9. Subdivision 1 of section 12-a of the lien law, as amended by 21 chapter 1048 of the laws of 1971, is amended to read as follows: 22 1. Within sixty days after the original filing, a lienor may amend his 23 lien upon twenty days notice to existing lienors, mortgagees and the 24 owner, provided that no action or proceeding to enforce or cancel the 25 mechanics' lien or employee's lien has been brought in the interim, 26 where the purpose of the amendment is to reduce the amount of the lien, 27 except the question of wilful exaggeration shall survive such amendment. 28 § 10. Subdivision 1 of section 13 of the lien law, as amended by chap- 29 ter 878 of the laws of 1947, is amended to read as follows: 30 (1) [A] An employee's lien, or a lien for materials furnished or labor 31 performed in the improvement of real property, shall have priority over 32 a conveyance, mortgage, judgment or other claim against such property 33 not recorded, docketed or filed at the time of the filing of the notice 34 of such lien, except as hereinafter in this chapter provided; over 35 advances made upon any mortgage or other encumbrance thereon after such 36 filing, except as hereinafter in this article provided; and over the 37 claim of a creditor who has not furnished materials or performed labor 38 upon such property, if such property has been assigned by the owner by a 39 general assignment for the benefit of creditors, within thirty days 40 before the filing of either of such notices; and also over an attachment 41 hereafter issued or a money judgment hereafter recovered upon a claim, 42 which, in whole or in part, was not for materials furnished, labor 43 performed or moneys advanced for the improvement of such real property; 44 and over any claim or lien acquired in any proceedings upon such judg- 45 ment. Such liens shall also have priority over advances made upon a 46 contract by an owner for an improvement of real property which contains 47 an option to the contractor, his successor or assigns to purchase the 48 property, if such advances were made after the time when the labor began 49 or the first item of material was furnished, as stated in the notice of 50 lien. If several buildings are demolished, erected, altered or repaired, 51 or several pieces or parcels of real property are improved, under one 52 contract, and there are conflicting liens thereon, each lienor shall 53 have priority upon the particular part of the real property or upon the 54 particular building or premises where his labor is performed or his 55 materials are used. Persons shall have no priority on account of the 56 time of filing their respective notices of liens, but all liens shall beS. 2844 7 1 on a parity except as hereinafter in section fifty-six of this chapter 2 provided; and except that in all cases laborers for daily or weekly 3 wages with a mechanic's lien, and employees with an employee's lien, 4 shall have preference over all other claimants under this article. 5 § 11. Section 17 of the lien law, as amended by chapter 324 of the 6 laws of 2000, is amended to read as follows: 7 § 17. Duration of lien. 1. (a) No mechanic's lien specified in this 8 article shall be a lien for a longer period than one year after the 9 notice of lien has been filed, unless within that time an action is 10 commenced to foreclose the lien, and a notice of the pendency of such 11 action, whether in a court of record or in a court not of record, is 12 filed with the county clerk of the county in which the notice of lien is 13 filed, containing the names of the parties to the action, the object of 14 the action, a brief description of the real property affected thereby, 15 and the time of filing the notice of lien; or unless an extension to 16 such lien, except for a lien on real property improved or to be improved 17 with a single family dwelling, is filed with the county clerk of the 18 county in which the notice of lien is filed within one year from the 19 filing of the original notice of lien, continuing such lien and such 20 lien shall be redocketed as of the date of filing such extension. Such 21 extension shall contain the names of the lienor and the owner of the 22 real property against whose interest therein such lien is claimed, a 23 brief description of the real property affected by such lien, the amount 24 of such lien, and the date of filing the notice of lien. No lien shall 25 be continued by such extension for more than one year from the filing 26 thereof. In the event an action is not commenced to foreclose the lien 27 within such extended period, such lien shall be extinguished unless an 28 order be granted by a court of record or a judge or justice thereof, 29 continuing such lien, and such lien shall be redocketed as of the date 30 of granting such order and a statement made that such lien is continued 31 by virtue of such order. A lien on real property improved or to be 32 improved with a single family dwelling may only be extended by an order 33 of a court of record, or a judge or justice thereof. No lien shall be 34 continued by court order for more than one year from the granting there- 35 of, but a new order and entry may be made in each of two successive 36 years. If a lienor is made a party defendant in an action to enforce 37 another lien, and the plaintiff or such defendant has filed a notice of 38 the pendency of the action within the time prescribed in this section, 39 the lien of such defendant is thereby continued. Such action shall be 40 deemed an action to enforce the lien of such defendant lienor. The fail- 41 ure to file a notice of pendency of action shall not abate the action as 42 to any person liable for the payment of the debt specified in the notice 43 of lien, and the action may be prosecuted to judgment against such 44 person. The provisions of this section in regard to continuing liens 45 shall apply to liens discharged by deposit or by order on the filing of 46 an undertaking. Where a lien is discharged by deposit or by order, a 47 notice of pendency of action shall not be filed. 48 (b) A lien, the duration of which has been extended by the filing of a 49 notice of the pendency of an action as above provided, shall neverthe- 50 less terminate as a lien after such notice has been canceled as provided 51 in section sixty-five hundred fourteen of the civil practice law and 52 rules or has ceased to be effective as constructive notice as provided 53 in section sixty-five hundred thirteen of the civil practice law and 54 rules. 55 2. (a) No employee's lien on real property shall be a lien for a long- 56 er period than one year after the notice of lien has been filed, unlessS. 2844 8 1 an extension to such lien is filed with the county clerk of the county 2 in which the notice of lien is filed within one year from the filing of 3 the original notice of lien, continuing such lien and such lien shall be 4 redocketed as of the date of filing such extension. Such extension shall 5 contain the names of the lienor and the owner of the real property 6 against whose interest therein such lien is claimed, a brief description 7 of the property affected by such lien, the amount of such lien, and the 8 date of filing the notice of lien. No lien shall be continued by such 9 extension for more than one year from the filing thereof. In the event 10 an action is not commenced to obtain judgment on the wage claim or to 11 foreclose the lien within such extended period, such lien shall be 12 extinguished unless an order be granted by a court of record or a judge 13 or justice thereof, continuing such lien, and such lien shall be redock- 14 eted as of the date of granting such order and a statement made that 15 such lien is continued by virtue of such order. 16 (b) No employee's lien on personal property shall be a lien for a 17 longer period than one year after the financing statement has been 18 recorded, unless an extension to such lien, is filed with the filing 19 office in which the financing statement is required to be filed pursuant 20 to section 9-501 of the uniform commercial code within one year from the 21 filing of the original financing statement, continuing such lien. Such 22 extension shall contain the names of the lienor and the owner of the 23 property against whose interest therein such lien is claimed, a brief 24 description of the prior financing statement to be extended, and the 25 date of filing the prior financing statement. No lien shall be contin- 26 ued by such extension for more than one year from the filing thereof. In 27 the event an action is not commenced to obtain judgment on the wage 28 claim or to foreclose the lien within such extended period, such lien 29 shall be extinguished unless an order be granted by a court of record or 30 a judge or justice thereof, continuing such lien, and such lien shall be 31 refiled as of the date of granting such order and a statement made that 32 such lien is continued by virtue of such order. 33 (c) If a lienor is made a party defendant in an action to enforce 34 another lien, and the plaintiff or such defendant has filed a notice of 35 the pendency of the action within the time prescribed in this section, 36 the lien of such defendant is thereby continued. Such action shall be 37 deemed an action to enforce the lien of such defendant lienor. The fail- 38 ure to file a notice of pendency of action shall not abate the action as 39 to any person liable for the payment of the debt specified in the notice 40 of lien, and the action may be prosecuted to judgment against such 41 person. The provisions of this section in regard to continuing liens 42 shall apply to liens discharged by deposit or by order on the filing of 43 an undertaking. Where a lien is discharged by deposit or by order, a 44 notice of pendency of action shall not be filed. 45 (d) Notwithstanding the foregoing, if a lienor commences a foreclosure 46 action or an action to obtain a judgment on the wage claim within one 47 year from the filing of the notice of lien on real property or the 48 recording of the financing statement creating lien on personal property, 49 the lien shall be extended during the pendency of the action and for one 50 hundred twenty days following the entry of final judgment in such 51 action, unless the action results in a final judgment or administrative 52 order in the lienor's favor on the wage claims and the lienor commences 53 a foreclosure action, in which instance the lien shall be valid during 54 the pendency of the foreclosure action. If a lien is extended due to the 55 pendency of a foreclosure action or an action to obtain a judgment on 56 the wage claim, the lienor shall file a notice of such pendency andS. 2844 9 1 extension with the county clerk of the county in which the notice of 2 lien is filed, containing the names of the parties to the action, the 3 object of the action, a brief description of the property affected 4 thereby, and the time of filing the notice of lien, or in the case of a 5 lien on personal property shall file such notice with the office author- 6 ized to accept financing statements pursuant to section 9-501 of the 7 uniform commercial code. For purposes of this section, an action to 8 obtain judgment on a wage claim includes an action brought in any court 9 of competent jurisdiction, the submission of a complaint to the depart- 10 ment of labor or the submission of a claim to arbitration pursuant to an 11 arbitration agreement. An action also includes an investigation of wage 12 claims by the commissioner of labor or the attorney general of the state 13 of New York, regardless of whether such investigation was initiated by a 14 complaint. 15 (e) A lien, the duration of which has been extended by the filing of a 16 notice of the pendency of an action as above provided, shall neverthe- 17 less terminate as a lien after such notice has been canceled as provided 18 in section sixty-five hundred fourteen of the civil practice law and 19 rules or has ceased to be effective as constructive notice as provided 20 in section sixty-five hundred thirteen of the civil practice law and 21 rules. 22 § 12. Subdivisions 2 and 4 of section 19 of the lien law, subdivision 23 2 as amended by chapter 310 of the laws of 1962, subdivision 4 as added 24 by chapter 582 of the laws of 2002 and paragraph a of subdivision 4 as 25 further amended by section 104 of part A of chapter 62 of the laws of 26 2011, are amended to read as follows: 27 (2) By failure to begin an action to foreclose such lien or to secure 28 an order continuing it, within one year from the time of filing the 29 notice of lien, unless (i) an action be begun within the same period to 30 foreclose a mortgage or another mechanic's lien upon the same property 31 or any part thereof and a notice of pendency of such action is filed 32 according to law, or (ii) an action is commenced to obtain a judgment on 33 a wage claim pursuant to subdivision two of section seventeen of this 34 article, but a lien, the duration of which has been extended by the 35 filing of a notice of the pendency of an action as herein provided, 36 shall nevertheless terminate as a lien after such notice has been 37 cancelled or has ceased to be effective as constructive notice. 38 (4) Either before or after the beginning of an action by the employer, 39 owner or contractor executing a bond or undertaking in an amount equal 40 to one hundred ten percent of such lien conditioned for the payment of 41 any judgment which may be rendered against the property or employer for 42 the enforcement of the lien: 43 a. The execution of any such bond or undertaking by any fidelity or 44 surety company authorized by the laws of this state to transact busi- 45 ness, shall be sufficient; and where a certificate of qualification has 46 been issued by the superintendent of financial services under the 47 provisions of section one thousand one hundred eleven of the insurance 48 law, and has not been revoked, no justification or notice thereof shall 49 be necessary. Any such company may execute any such bond or undertaking 50 as surety by the hand of its officers, or attorney, duly authorized 51 thereto by resolution of its board of directors, a certified copy of 52 which resolution, under the seal of said company, shall be filed with 53 each bond or undertaking. Any such bond or undertaking shall be filed 54 with the clerk of the county in which the notice of lien is filed, and a 55 copy shall be served upon the adverse party. The undertaking is effec- 56 tive when so served and filed. If a certificate of qualification issuedS. 2844 10 1 pursuant to subsections (b), (c) and (d) of section one thousand one 2 hundred eleven of the insurance law is not filed with the undertaking, a 3 party may except, to the sufficiency of a surety and by a written notice 4 of exception served upon the adverse party within ten days after 5 receipt, a copy of the undertaking. Exceptions deemed by the court to 6 have been taken unnecessarily, or for vexation or delay, may, upon 7 notice, be set aside, with costs. Where no exception to sureties is 8 taken within ten days or where exceptions taken are set aside, the 9 undertaking shall be allowed. 10 b. In the case of bonds or undertakings not executed pursuant to para- 11 graph a of this subdivision, the employer, owner or contractor shall 12 execute an undertaking with two or more sufficient sureties, who shall 13 be free holders, to the clerk of the county where the premises are situ- 14 ated. The sureties must together justify in at least double the sum 15 named in the undertaking. A copy of the undertaking, with notice that 16 the sureties will justify before the court, or a judge or justice there- 17 of, at the time and place therein mentioned, must be served upon the 18 lienor or his attorney, not less than five days before such time. Upon 19 the approval of the undertaking by the court, judge or justice an order 20 shall be made by such court, judge or justice discharging such lien. 21 c. If the lienor cannot be found, or does not appear by attorney, 22 service under this subsection may be made by leaving a copy of such 23 undertaking and notice at the lienor's place of residence, or if a 24 corporation at its principal place of business within the state as stat- 25 ed in the notice of lien, with a person of suitable age and discretion 26 therein, or if the house of his abode or its place of business is not 27 stated in said notice of lien and is not known, then in such manner as 28 the court may direct. The premises, if any, described in the notice of 29 lien as the lienor's residence or place of business shall be deemed to 30 be his said residence or its place of business for the purposes of said 31 service at the time thereof, unless it is shown affirmatively that the 32 person servicing the papers or directing the service had knowledge to 33 the contrary. Notwithstanding the other provisions of this subdivision 34 relating to service of notice, in any case where the mailing address of 35 the lienor is outside the state such service may be made by registered 36 or certified mail, return receipt requested, to such lienor at the mail- 37 ing address contained in the notice of lien. 38 d. Except as otherwise provided in this subdivision, the provisions of 39 article twenty-five of the civil practice law and rules regulating 40 undertakings is applicable to a bond or undertaking given for the 41 discharge of a lien on account of private improvements or of an employ- 42 ee's lien. 43 § 13. Section 24 of the lien law, as amended by chapter 515 of the 44 laws of 1929, is amended to read as follows: 45 § 24. Enforcement of [mechanic's] lien. (1) Real property. The 46 [mechanics'] liens on real property specified in this article may be 47 enforced against the property specified in the notice of lien and which 48 is subject thereto and against any person liable for the debt upon which 49 the lien is founded, as prescribed in article three of this chapter. 50 (2) Personal property. An employee's lien on personal property speci- 51 fied in this article may immediately be enforced against the property 52 through a foreclosure as prescribed in article nine of the uniform 53 commercial code, or upon judgment obtained by the employee, commissioner 54 of labor or attorney general of the state of New York, may be enforced 55 in any manner available to the judgment creditor pursuant to article 56 nine of the uniform commercial code or other applicable laws.S. 2844 11 1 § 14. Section 26 of the lien law, as amended by chapter 373 of the 2 laws of 1977, is amended to read as follows: 3 § 26. Subordination of liens after agreement with owner. In case an 4 owner of real property shall execute to one or more persons, or a corpo- 5 ration, as trustee or trustees, a bond and mortgage or a note and mort- 6 gage affecting such property in whole or in part, or an assignment of 7 the moneys due or to become due under a contract for a building loan in 8 relation to such property, and in case such mortgage, if any, shall be 9 recorded in the office of the register of the county where such real 10 property is situated, or if such county has no register then in the 11 office of the clerk of such county, and in case such assignment, if any, 12 shall be filed in the office of the clerk of the county where such real 13 property is situated; and in case lienors having [mechanics'] liens 14 against said real property, notices of which have been filed up to and 15 not later than fifteen days after the recording of such mortgage or the 16 filing of such assignment, and which liens have not been discharged as 17 in this article provided, shall, to the extent of at least fifty-five 18 per centum of the aggregate amount for which such notices of liens have 19 been so filed, approve such bond and mortgage or such note and mortgage, 20 if any, and such assignment, if any, by an instrument or instruments in 21 writing, duly acknowledged and filed in the office of such county clerk, 22 then all mechanics' liens for labor performed or material furnished 23 prior to the recording of such mortgage or filing of such assignment, 24 whether notices thereof have been theretofore or are thereafter filed 25 and which have not been discharged as in this article provided, shall be 26 subordinate to the lien of such trust bond and mortgage or such trust 27 note and mortgage to the extent of the aggregate amount of all certif- 28 icates of interest therein issued by such trustee or trustees, or their 29 successors, for moneys loaned, materials furnished, labor performed and 30 any other indebtedness incurred after said trust mortgage shall have 31 been recorded, and for expenses in connection with said trust mortgage, 32 and shall also be subordinate to the lien of the bond and mortgage or 33 note and mortgage, given to secure the amount agreed to be advanced 34 under such contract for a building loan to the extent of the amount 35 which shall be advanced by the holder of such bond and mortgage or such 36 note and mortgage to the trustee or trustees, or their successors, under 37 such assignment. The provisions of this section shall apply to all bonds 38 and mortgages and notes and mortgages and all assignments of moneys due, 39 or to become due under building loan contracts executed by such owner, 40 in like manner, and recorded or filed, from time to time as hereinbefore 41 provided. In case of an assignment to trustees under the provisions of 42 this section, the trustees and their successors shall be the agents of 43 the assignor to receive and receipt for any and all sums advanced by the 44 holder of the building loan bond and mortgage or the building loan note 45 and mortgage under the building loan contract and such assignment. No 46 lienor shall have any priority over the bond and mortgage or note and 47 mortgage given to secure the money agreed to be advanced under a build- 48 ing loan contract or over the advances made thereunder, by reason of any 49 act preceding the making and approval of such assignment. 50 § 15. Section 38 of the lien law, as amended by chapter 859 of the 51 laws of 1930, is amended to read as follows: 52 § 38. Itemized statement may be required of lienor. A lienor who has 53 filed a notice of mechanic's lien shall, on demand in writing, deliver 54 to the owner or contractor making such demand a statement in writing 55 which shall set forth the items of labor and/or material and the value 56 thereof which make up the amount for which he claims a lien, and whichS. 2844 12 1 shall also set forth the terms of the contract under which such items 2 were furnished. The statement shall be verified by the lienor or his 3 agent in the form required for the verification of notices in section 4 nine of this [chapter] article. If the lienor shall fail to comply with 5 such a demand within five days after the same shall have been made by 6 the owner or contractor, or if the lienor delivers an insufficient 7 statement, the person aggrieved may petition the supreme court of this 8 state or any justice thereof, or the county court of the county where 9 the premises are situated, or the county judge of such county for an 10 order directing the lienor within a time specified in the order to 11 deliver to the petitioner the statement required by this section. Two 12 days' notice in writing of such application shall be served upon the 13 lienor. Such service shall be made in the manner provided by law for the 14 personal service of a summons. The court or a justice or judge thereof 15 shall hear the parties and upon being satisfied that the lienor has 16 failed, neglected or refused to comply with the requirements of this 17 section shall have an appropriate order directing such compliance. In 18 case the lienor fails to comply with the order so made within the time 19 specified, then upon five days' notice to the lienor, served in the 20 manner provided by law for the personal service of a summons, the court 21 or a justice or judge thereof may make an order cancelling the lien. 22 § 16. Section 39 of the lien law, as added by chapter 859 of the laws 23 of 1930, is amended to read as follows: 24 § 39. Lien wilfully exaggerated is void. In any action or proceeding 25 to enforce a [mechanic's] lien upon a private or public improvement or 26 in which the validity of the lien is an issue, if the court shall find 27 that a lienor has wilfully exaggerated the amount for which he claims a 28 lien as stated in his notice of lien, his lien shall be declared to be 29 void and no recovery shall be had thereon. No such lienor shall have a 30 right to file any other or further lien for the same claim. A second or 31 subsequent lien filed in contravention of this section may be vacated 32 upon application to the court on two days' notice. 33 § 17. Section 40 of the lien law, as amended by chapter 515 of the 34 laws of 1929, is amended to read as follows: 35 § 40. Construction of article. This article is to be construed in 36 connection with article two of this chapter, and provides proceedings 37 for the enforcement of employee's liens on real property, as well as 38 liens for labor performed and materials furnished in the improvement of 39 real property, created by virtue of such article. 40 § 18. Section 41 of the lien law, as amended by chapter 807 of the 41 laws of 1952, is amended to read as follows: 42 § 41. Enforcement of mechanic's or employee's lien on real property. A 43 mechanic's lien or employee's lien on real property may be enforced 44 against such property, and against a person liable for the debt upon 45 which the lien is founded, by an action, by the lienor, his assignee or 46 legal representative, in the supreme court or in a county court other- 47 wise having jurisdiction, regardless of the amount of such debt, or in a 48 court which has jurisdiction in an action founded on a contract for a 49 sum of money equivalent to the amount of such debt. 50 § 19. Section 43 of the lien law, as amended by chapter 310 of the 51 laws of 1962, is amended to read as follows: 52 § 43. Action in a court of record; consolidation of actions. The 53 provisions of the real property actions and proceedings law relating to 54 actions for the foreclosure of a mortgage upon real property, and the 55 sale and the distribution of the proceeds thereof apply to actions in a 56 court of record, to enforce mechanics' liens and employees' liens onS. 2844 13 1 real property, except as otherwise provided in this article. If actions 2 are brought by different lienors in a court of record, the court in 3 which the first action was brought, may, upon its own motion, or upon 4 the application of any party in any of such actions, consolidate all of 5 such actions. 6 § 20. Section 46 of the lien law, as amended by chapter 515 of the 7 laws of 1929, is amended to read as follows: 8 § 46. Action in a court not of record. If an action to enforce a 9 mechanic's lien or employee's lien against real property is brought in a 10 court not of record, it shall be commenced by the personal service upon 11 the owner of a summons and complaint verified in the same manner as a 12 complaint in an action in a court of record. The complaint must set 13 forth substantially the facts contained in the notice of lien, and the 14 substance of the agreement under which the labor was performed or the 15 materials were furnished, or if the lien is based upon a wage claim as 16 defined in section two of this chapter, the basis for such wage claim. 17 The form and contents of the summons shall be the same as provided by 18 law for the commencement of an action upon a contract in such court. The 19 summons must be returnable not less than twelve nor more than twenty 20 days after the date of the summons, or if service is made by publica- 21 tion, after the day of the last publication of the summons. Service 22 must be made at least eight days before the return day. 23 § 21. Section 50 of the lien law, as amended by chapter 515 of the 24 laws of 1929, is amended to read as follows: 25 § 50. Execution. Execution may be issued upon a judgment obtained in 26 an action to enforce a mechanic's lien or an employee's lien against 27 real property in a court not of record, which shall direct the officer 28 to sell the title and interest of the owner in the premises, upon which 29 the lien set forth in the complaint existed at the time of filing the 30 notice of lien. 31 § 22. Section 53 of the lien law, as amended by chapter 515 of the 32 laws of 1929, is amended to read as follows: 33 § 53. Costs and disbursements. If an action is brought to enforce a 34 mechanic's lien or an employee's lien against real property in a court 35 of record, the costs and disbursements shall rest in the discretion of 36 the court, and may be awarded to the prevailing party. The judgment 37 rendered in such an action shall include the amount of such costs and 38 specify to whom and by whom the costs are to be paid. If such action is 39 brought in a court not of record, they shall be the same as allowed in 40 civil actions in such court. The expenses incurred in serving the 41 summons by publication may be added to the amount of costs now allowed 42 in such court. 43 § 23. Section 59 of the lien law, as amended by chapter 515 of the 44 laws of 1929, is amended to read as follows: 45 § 59. Vacating of a [mechanic's] lien; cancellation of bond; return of 46 deposit, by order of court. 1. A mechanic's lien notice of which has 47 been filed on real property or a bond given to discharge the same may be 48 vacated and cancelled or a deposit made to discharge a lien pursuant to 49 section twenty of this chapter may be returned, by an order of a court 50 of record. Before such order shall be granted, a notice shall be served 51 upon the lienor, either personally or by leaving it as his last known 52 place of residence, with a person of suitable age, with directions to 53 deliver it to the lienor. Such notice shall require the lienor to 54 commence an action to enforce the lien, within a time specified in the 55 notice, not less than thirty days from the time of service, or show 56 cause at a special term of a court of record, or at a county court, in aS. 2844 14 1 county in which the property is situated, at a time and place specified 2 therein, why the notice of lien filed or the bond given should not be 3 vacated and cancelled, or the deposit returned, as the case may be. 4 Proof of such service and that the lienor has not commenced the action 5 to foreclose such lien, as directed in the notice, shall be made by 6 affidavit, at the time of applying for such order. 7 2. An employee's lien notice of which has been filed on real property 8 or a bond given to discharge the same may be vacated and cancelled or a 9 deposit made to discharge a lien pursuant to section twenty of this 10 chapter may be returned, by an order of a court of record. Before such 11 order shall be granted, a notice shall be served upon the lienor, either 12 personally or by leaving it at his last known place of residence or 13 attorney's place of business, with a person of suitable age, with 14 directions to deliver it to the lienor. Such notice shall require the 15 lienor to commence an action to enforce the lien, or to commence an 16 action to obtain judgment on the wage claim upon which the lien was 17 established, within a time specified in the notice, not less than ninety 18 days from the time of service, or show cause at a special term of a 19 court of record, or at a county court, in a county in which the property 20 is situated, at a time and place specified therein, why the notice of 21 lien filed or the bond given should not be vacated and cancelled, or the 22 deposit returned, as the case may be. Proof of such service and that the 23 lienor has not commenced the action to foreclose such lien or an action 24 to obtain judgment on the wage claim upon which the lien was estab- 25 lished, as directed in the notice, shall be made by affidavit, at the 26 time of applying for such order. 27 § 24. Section 62 of the lien law, as amended by chapter 697 of the 28 laws of 1934, is amended to read as follows: 29 § 62. Bringing in new parties. A lienor who has filed a notice of lien 30 after the commencement of an action in a court of record to foreclose or 31 enforce an employee's lien or a mechanic's lien against real property or 32 a public improvement, may at any time up to and including the day 33 preceding the day on which the trial of such action is commenced, make 34 application upon notice to the plaintiff or his attorney in such action, 35 to be made a party therein. Upon good cause shown, the court must order 36 such lienor to be brought in by amendment. If the application is made by 37 any other party in said action to make such lienor or other person a 38 party, the court may in its discretion direct such lienor or other 39 person to be brought in by like amendment. The order to be entered on 40 such application shall provide the time for and manner of serving the 41 pleading of such additional lienor or other person and shall direct that 42 the pleadings, papers and proceedings of the other several parties in 43 such action, shall be deemed amended, so as not to require the making or 44 serving of papers other than said order to effectuate such amendment, 45 and shall further provide that the allegations in the answer of such 46 additional lienor or other person shall, for the purposes of the action, 47 be deemed denied by the other parties therein. The action shall be so 48 conducted by the court as not to cause substantially any delay in the 49 trial thereof. The bringing in of such additional lienor or other 50 person shall be without prejudice to the proceedings had, and if the 51 action be on the calendar of the court, same shall retain its place on 52 such calendar without the necessity of serving a new note of issue and 53 new notices of trial. 54 § 25. Subdivision 3 of section 199-a of the labor law, as amended by 55 chapter 564 of the laws of 2010, is amended to read as follows:S. 2844 15 1 3. Each employee and his or her authorized representative shall be 2 notified in writing, of the termination of the commissioner's investi- 3 gation of the employee's complaint and the result of such investigation, 4 of any award and collection of back wages and civil penalties, and of 5 any intent to seek criminal penalties. In the event that criminal penal- 6 ties are sought the employee and his or her authorized representative 7 shall be notified of the outcome of prosecution. 8 § 26. Subdivision 2 of section 663 of the labor law, as amended by 9 chapter 564 of the laws of 2010, is amended to read as follows: 10 2. By commissioner. On behalf of any employee paid less than the wage 11 to which the employee is entitled under the provisions of this article, 12 the commissioner may bring any legal action necessary, including admin- 13 istrative action, to collect such claim, and the employer shall be 14 required to pay the full amount of the underpayment, plus costs, and 15 unless the employer proves a good faith basis to believe that its under- 16 payment was in compliance with the law, an additional amount as liqui- 17 dated damages. Liquidated damages shall be calculated by the commission- 18 er as no more than one hundred percent of the total amount of 19 underpayments found to be due the employee. In any action brought by the 20 commissioner in a court of competent jurisdiction, liquidated damages 21 shall be calculated as an amount equal to one hundred percent of under- 22 payments found to be due the employee. Each employee or his or her 23 authorized representative shall be notified in writing of the outcome of 24 any legal action brought on the employee's behalf pursuant to this 25 section. 26 § 27. Subdivision 5 of section 6201 of the civil practice law and 27 rules, as amended by chapter 860 of the laws of 1977 and as renumbered 28 by chapter 618 of the laws of 1992, is amended and a new subdivision 6 29 is added to read as follows: 30 5. the cause of action is based on a judgment, decree or order of a 31 court of the United States or of any other court which is entitled to 32 full faith and credit in this state, or on a judgment which qualifies 33 for recognition under the provisions of article 53[.] of this chapter; 34 or 35 6. the cause of action is based on wage claims. "Wage claims," when 36 used in this chapter, shall include any claims of violations of articles 37 five, six, and nineteen of the labor law, section two hundred fifteen of 38 the labor law, and the related regulations or wage orders promulgated by 39 the commissioner of labor, including but not limited to any claims of 40 unpaid, minimum, overtime, and spread-of-hours pay, unlawfully retained 41 gratuities, unlawful deductions from wages, unpaid commissions, unpaid 42 benefits and wage supplements, and retaliation, and any claims pursuant 43 to 18 U.S.C. § 1595, 29 U.S.C. § 201 et seq., and/or employment contract 44 as well as the concomitant liquidated damages and penalties authorized 45 pursuant to the labor law, the Fair Labor Standards Act, or any employ- 46 ment contract. 47 § 28. Section 6210 of the civil practice law and rules, as added by 48 chapter 860 of the laws of 1977, is amended to read as follows: 49 § 6210. Order of attachment on notice; temporary restraining order; 50 contents. Upon a motion on notice for an order of attachment, the court 51 may, without notice to the defendant, grant a temporary restraining 52 order prohibiting the transfer of assets by a garnishee as provided in 53 subdivision (b) of section 6214. When attachment is sought pursuant to 54 subdivision six of section 6201, and if the employer contests the 55 motion, the court shall hold a hearing within ten days of when the 56 employer's response to plaintiffs' motion for attachment is due. TheS. 2844 16 1 contents of the order of attachment granted pursuant to this section 2 shall be as provided in subdivision (a) of section 6211. 3 § 29. Subdivision (b) of section 6211 of the civil practice law and 4 rules, as amended by chapter 566 of the laws of 1985, is amended to read 5 as follows: 6 (b) Confirmation of order. Except where an order of attachment is 7 granted on the ground specified in subdivision one or six of section 8 6201, an order of attachment granted without notice shall provide that 9 within a period not to exceed five days after levy, the plaintiff shall 10 move, on such notice as the court shall direct to the defendant, the 11 garnishee, if any, and the sheriff, for an order confirming the order of 12 attachment. Where an order of attachment without notice is granted on 13 the ground specified in subdivision one or six of section 6201, the 14 court shall direct that the statement required by section 6219 be served 15 within five days, that a copy thereof be served upon the plaintiff, and 16 the plaintiff shall move within ten days after levy for an order 17 confirming the order of attachment. If the plaintiff upon such motion 18 shall show that the statement has not been served and that the plaintiff 19 will be unable to satisfy the requirement of subdivision (b) of section 20 6223 until the statement has been served, the court may grant one exten- 21 sion of the time to move for confirmation for a period not to exceed ten 22 days. If plaintiff fails to make such motion within the required period, 23 the order of attachment and any levy thereunder shall have no further 24 effect and shall be vacated upon motion. Upon the motion to confirm, the 25 provisions of subdivision (b) of section 6223 shall apply. An order of 26 attachment granted without notice may provide that the sheriff refrain 27 from taking any property levied upon into his actual custody, pending 28 further order of the court. 29 § 30. Subdivisions (b) and (e) of rule 6212 of the civil practice law 30 and rules, subdivision (b) as separately amended by chapters 15 and 860 31 of the laws of 1977 and subdivision (e) as added by chapter 860 of the 32 laws of 1977, are amended to read as follows: 33 (b) Undertaking. [On] 1. Except where an order of attachment is sought 34 on the ground specified in subdivision six of section 6201, on a motion 35 for an order of attachment, the plaintiff shall give an undertaking, in 36 a total amount fixed by the court, but not less than five hundred 37 dollars, a specified part thereof conditioned that the plaintiff shall 38 pay to the defendant all costs and damages, including reasonable attor- 39 ney's fees, which may be sustained by reason of the attachment if the 40 defendant recovers judgment or if it is finally decided that the plain- 41 tiff was not entitled to an attachment of the defendant's property, and 42 the balance conditioned that the plaintiff shall pay to the sheriff all 43 of his allowable fees. 44 2. On a motion for an attachment pursuant to subdivision six of 45 section 6201, the court shall order that the plaintiff give an accessi- 46 ble undertaking of no more than five hundred dollars, or in the alterna- 47 tive, may waive the undertaking altogether. The attorney for the plain- 48 tiff shall not be liable to the sheriff for such fees. The surety on the 49 undertaking shall not be discharged except upon notice to the sheriff. 50 (e) Damages. [The] Except where an order of attachment is sought on 51 the ground specified in subdivision six of section 6201, the plaintiff 52 shall be liable to the defendant for all costs and damages, including 53 reasonable attorney's fees, which may be sustained by reason of the 54 attachment if the defendant recovers judgment, or if it is finally 55 decided that the plaintiff was not entitled to an attachment of theS. 2844 17 1 defendant's property. Plaintiff's liability shall not be limited by the 2 amount of the undertaking. 3 § 31. Section 6223 of the civil practice law and rules, as amended by 4 chapter 860 of the laws of 1977, is amended to read as follows: 5 § 6223. Vacating or modifying attachment. (a) Motion to vacate or 6 modify. Prior to the application of property or debt to the satisfac- 7 tion of a judgment, the defendant, the garnishee or any person having an 8 interest in the property or debt may move, on notice to each party and 9 the sheriff, for an order vacating or modifying the order of attachment. 10 Upon the motion, the court may give the plaintiff a reasonable opportu- 11 nity to correct any defect. [If] Except as provided under subdivision 12 (b), if, after the defendant has appeared in the action, the court 13 determines that the attachment is unnecessary to the security of the 14 plaintiff, it shall vacate the order of attachment. Such a motion shall 15 not of itself constitute an appearance in the action. 16 (b) Burden of proof. [Upon] Except where an order of attachment is 17 granted pursuant to subdivision six of section 6201, upon a motion to 18 vacate or modify an order of attachment the plaintiff shall have the 19 burden of establishing the grounds for the attachment, the need for 20 continuing the levy and the probability that he will succeed on the 21 merits. Upon a motion to vacate or modify an order of attachment granted 22 pursuant to subdivision six of section 6201, the defendant shall have 23 the burden to demonstrate that the attachment is unnecessary to the 24 security of the plaintiff, in order to vacate or modify the attachment 25 order. 26 § 32. Paragraph (b) of section 624 of the business corporation law, as 27 amended by chapter 449 of the laws of 1997, is amended to read as 28 follows: 29 (b) Any person who shall have been a shareholder of record of a corpo- 30 ration, or who is or shall have been a laborer, servant or employee, 31 upon at least five days' written demand shall have the right to examine 32 in person or by agent or attorney, during usual business hours, its 33 minutes of the proceedings of its shareholders and record of sharehold- 34 ers and to make extracts therefrom for any purpose reasonably related to 35 such person's interest as a shareholder, laborer, servant or employee. 36 Holders of voting trust certificates representing shares of the corpo- 37 ration shall be regarded as shareholders for the purpose of this 38 section. Any such agent or attorney shall be authorized in a writing 39 that satisfies the requirements of a writing under paragraph (b) of 40 section 609 (Proxies). A corporation requested to provide information 41 pursuant to this paragraph shall make available such information in 42 written form and in any other format in which such information is main- 43 tained by the corporation and shall not be required to provide such 44 information in any other format. If a request made pursuant to this 45 paragraph includes a request to furnish information regarding beneficial 46 owners, the corporation shall make available such information in its 47 possession regarding beneficial owners as is provided to the corporation 48 by a registered broker or dealer or a bank, association or other entity 49 that exercises fiduciary powers in connection with the forwarding of 50 information to such owners. The corporation shall not be required to 51 obtain information about beneficial owners not in its possession. 52 § 33. Section 630 of the business corporation law, paragraph (a) as 53 amended by chapter 5 of the laws of 2016, paragraph (c) as amended by 54 chapter 746 of the laws of 1963, is amended to read as follows: 55 § 630. Liability of shareholders for wages due to laborers, servants or 56 employees.S. 2844 18 1 (a) The ten largest shareholders, as determined by the fair value of 2 their beneficial interest as of the beginning of the period during which 3 the unpaid services referred to in this section are performed, of every 4 domestic corporation or of any foreign corporation, when the unpaid 5 services were performed in the state, no shares of which are listed on a 6 national securities exchange or regularly quoted in an over-the-counter 7 market by one or more members of a national or an affiliated securities 8 association, shall jointly and severally be personally liable for all 9 debts, wages or salaries due and owing to any of its laborers, servants 10 or employees other than contractors, for services performed by them for 11 such corporation. [Before such laborer, servant or employee shall charge12such shareholder for such services, he shall give notice in writing to13such shareholder that he intends to hold him liable under this section.14Such notice shall be given within one hundred and eighty days after15termination of such services, except that if, within such period, the16laborer, servant or employee demands an examination of the record of17shareholders under paragraph (b) of section 624 (Books and records;18right of inspection, prima facie evidence) of this article, such notice19may be given within sixty days after he has been given the opportunity20to examine the record of shareholders. An action to enforce such liabil-21ity shall be commenced within ninety days after the return of an22execution unsatisfied against the corporation upon a judgment recovered23against it for such services.] The provisions of this paragraph shall 24 not apply to an investment company registered as such under an act of 25 congress entitled "Investment Company Act of 1940." 26 (b) For the purposes of this section, wages or salaries shall mean all 27 compensation and benefits payable by an employer to or for the account 28 of the employee for personal services rendered by such employee includ- 29 ing any concomitant liquidated damages, penalties, interest, attorney's 30 fees or costs. These shall specifically include but not be limited to 31 salaries, overtime, vacation, holiday and severance pay; employer 32 contributions to or payments of insurance or welfare benefits; employer 33 contributions to pension or annuity funds; and any other moneys properly 34 due or payable for services rendered by such employee. 35 (c) A shareholder who has paid more than his pro rata share under this 36 section shall be entitled to contribution pro rata from the other share- 37 holders liable under this section with respect to the excess so paid, 38 over and above his pro rata share, and may sue them jointly or severally 39 or any number of them to recover the amount due from them. Such recov- 40 ery may be had in a separate action. As used in this paragraph, "pro 41 rata" means in proportion to beneficial share interest. Before a share- 42 holder may claim contribution from other shareholders under this para- 43 graph, he shall[, unless they have been given notice by a laborer, serv-44ant or employee under paragraph (a),] give them notice in writing that 45 he intends to hold them so liable to him. Such notice shall be given by 46 him within twenty days after the date that [notice was given to him by] 47 he became aware that a laborer, servant or employee may seek to hold him 48 liable under paragraph (a). 49 § 34. Subdivision (c) of section 609 of the limited liability company 50 law, as added by chapter 537 of the laws of 2014, is amended to read as 51 follows: 52 (c) Notwithstanding the provisions of subdivisions (a) and (b) of this 53 section, the ten members with the largest percentage ownership interest, 54 as determined as of the beginning of the period during which the unpaid 55 services referred to in this section are performed, of every limited 56 liability company, shall jointly and severally be personally liable forS. 2844 19 1 all debts, wages or salaries due and owing to any of its laborers, serv- 2 ants or employees, for services performed by them for such limited 3 liability company. [Before such laborer, servant or employee shall4charge such member for such services, he or she shall give notice in5writing to such member that he or she intends to hold such member liable6under this section. Such notice shall be given within one hundred eighty7days after termination of such services. An action to enforce such8liability shall be commenced within ninety days after the return of an9execution unsatisfied against the limited liability company upon a judg-10ment recovered against it for such services.] A member who has paid more 11 than his or her pro rata share under this section shall be entitled to 12 contribution pro rata from the other members liable under this section 13 with respect to the excess so paid, over and above his or her pro rata 14 share, and may sue them jointly or severally or any number of them to 15 recover the amount due from them. Such recovery may be had in a separate 16 action. As used in this subdivision, "pro rata" means in proportion to 17 percentage ownership interest. Before a member may claim contribution 18 from other members under this section, he or she shall give them notice 19 in writing that he or she intends to hold them so liable to him or her. 20 § 35. Section 1102 of the limited liability company law is amended by 21 adding a new subdivision (e) to read as follows: 22 (e) Any person who is or shall have been a laborer, servant or employ- 23 ee of a limited liability company, upon at least five days' written 24 demand shall have the right to examine in person or by agent or attor- 25 ney, during usual business hours, records described in paragraph two of 26 subdivision (a) of this section throughout the period of time during 27 which such laborer, servant or employee provided services to such compa- 28 ny. A company requested to provide information pursuant to this para- 29 graph shall make available such records in written form and in any other 30 format in which such information is maintained by the company and shall 31 not be required to provide such information in any other format. Upon 32 refusal by the company or by an officer or agent of the company to 33 permit an inspection of the records described in this paragraph, the 34 person making the demand for inspection may apply to the supreme court 35 in the judicial district where the office of the company is located, 36 upon such notice as the court may direct, for an order directing the 37 company, its members or managers to show cause why an order should not 38 be granted permitting such inspection by the applicant. Upon the return 39 day of the order to show cause, the court shall hear the parties summar- 40 ily, by affidavit or otherwise, and if it appears that the applicant is 41 qualified and entitled to such inspection, the court shall grant an 42 order compelling such inspection and awarding such further relief as to 43 the court may seem just and proper. If the applicant is found to be 44 qualified and entitled to such inspection, the company shall pay all 45 reasonable attorney's fees and costs of said applicant related to the 46 demand for inspection of the records. 47 § 36. This act shall take effect on the thirtieth day after it shall 48 have become a law. The procedures and rights created in this act may be 49 used by employees, laborers or servants in connection with claims for 50 liabilities that arose prior to the effective date.
